Index Rebalancing
Understand how Solana Index Fund indexes are rebalanced to maintain accurate representation of the market.
Rebalancing Overview
Rebalancing is the process of adjusting the composition of an index to ensure it accurately represents its target market segment. In the Solana Index Fund protocol, all indexes are rebalanced every 6 hours to maintain their accuracy and relevance.
Rebalancing Schedule
Rebalancing Process
The rebalancing process involves several steps:
- Data Collection - Gathering current market data for all relevant tokens
- Eligibility Screening - Determining which tokens meet the inclusion criteria
- Weight Calculation - Calculating the appropriate weight for each token
- Composition Comparison - Comparing the current index composition with the target composition
- Trade Execution - Executing the necessary trades to achieve the target composition
- Verification - Verifying that the new composition accurately represents the target market
Rebalancing Criteria
Each index has specific criteria for inclusion and weighting during the rebalancing process:
SINDEX Rebalancing
SINDEX tracks the top 500 SPL tokens by market capitalization. The rebalancing process ensures that the index always represents the current top 500 tokens.
Inclusion Criteria:
- Must be an SPL token on the Solana blockchain
- Must be among the top 500 tokens by market capitalization
- Must have sufficient liquidity (minimum 24h trading volume)
- Must not be a stablecoin or wrapped token
- Must have been trading for at least 7 days
Weighting Methodology:
- Weighted by market capitalization
- Maximum weight of 5% per token to ensure diversification
- Minimum weight of 0.01% per token
Rebalancing Impact
The frequent rebalancing schedule (every 6 hours) ensures that the indexes remain accurate and up-to-date with market conditions. This has several benefits:
- Accuracy - Indexes accurately represent their target market segments
- Responsiveness - Indexes quickly adapt to market changes
- Fairness - Tokens are included or excluded based on objective criteria
- Transparency - The rebalancing process is fully transparent and verifiable
Rebalancing Schedule
All Solana Index Fund indexes are rebalanced at the following times (UTC):
| Time (UTC) | Indexes Rebalanced | Process Duration |
|---|---|---|
| 00:00 | All indexes (SINDEX, MINDEX, DINDEX, NINDEX) | ~5 minutes |
| 06:00 | All indexes (SINDEX, MINDEX, DINDEX, NINDEX) | ~5 minutes |
| 12:00 | All indexes (SINDEX, MINDEX, DINDEX, NINDEX) | ~5 minutes |
| 18:00 | All indexes (SINDEX, MINDEX, DINDEX, NINDEX) | ~5 minutes |
In addition to the regular 6-hour rebalancing, a more comprehensive rebalancing occurs every Saturday at 12:00 midnight UTC, which coincides with the weekly token burning process.
Rebalancing Transparency
All rebalancing activities are fully transparent and can be verified on-chain. After each rebalancing, the following information is published:
- New index composition with token weights
- Tokens added to and removed from the index
- Transactions executed during the rebalancing
- Impact on index value
This information is available on the Solana Index Fund platform and can be verified using blockchain explorers.